Dollar - Gold Cup

Call me crazy, but I see the "Dollar" taking off, and the Metals collapsing.

Of course this is only for the next few years, because printing "Dollars" at the rate the private Federal Reserve is going, is not only unsustainable, but it is sheer INSANITY. Clearly there is an Evil Agenda here, and the American Middle Class is targeted for destruction.

Meanwhile we can "follow the money", by buying some Dec 2011 Gold Put Options at 700 Strike for under $15. WHEN (not IF) those go In The Money sometime next year, that will give about 10X return. Buying Dollar Calls or British Pound Puts is another strategy. Any one of those should pay off BIG TIME. Just go out far enough so that the Options do not degrade too severely, before getting a chance to cash in.

OK. So call it my "opinion." I see what I see. Call me blind. Call me crazy. Time will tell.

I don't know about USD $100, but I am expecting it going to 78 short term. There are many problems facing the USD, interest rates are too low 0.25% to sustain any long term gains. Any bullish news on the USD has been spurring buying in the bonds not the USD. The only thing that would push the USD index over 100 would be Dow 2500.

There are many problems in the Eur, and Gbp economy as well. I am short the Euro, and the Pound looking for a large sell off, as I am betting on the USD being stronger than those markets. I too think equities are topping out for many months, a new high would violate this projection.

Sure hope all that open interest in the Dec GC contract is not expecting physical delivery from the Comex !

What I see is a potentially explosive short squeeze underway on the paper gold side of the market as all these naked short paper promises are coming due for physical delivery of the real live in the flesh 1000 ounce gold bars next month. After this ultimate "margin call" event passes, then yeah the appetite for metal should quickly reverse direction and turn into a signficant "profit taking" event (price collapse).

So, I agree with your thesis, but the timing may take another few weeks to ripen and we see that final flush out of the naked shorts first.

Robert Prechter is forecasting a primary wave-C to develop from this price pattern, and has mid 90's as a minimum upside price target in the DX, and GC to collapse to mid-600's. DCI has dollar bulls at 3% !

I find it interesting these significant boom / bust cycles are becoming more frequent and are developing and collapsing in a much faster time cycle.

Great Posts! Apparently Prechter is confirming what I have been seeing for months. Gold below $600 would be a fire sale. Of course its "going vertical" is unsustainable, but we cannot know for sure when the Top will be in. Major Tops and Bottoms are associated with increased volatility, so all signs are in, for an imminent collapse.

As for the Commercials at COMEX who hold all those naked short positions -- they have been doing that for DECADES. They merely roll them over. Of course we know that this cannot go on forever, and when they are finally found out, their only option will be to DEFAULT. That will send Metals prices to the moon -- OVERNIGHT.

So being short the Euro is a safe bet now, as even in light of the Metals surging, it has not been able to muster enough strength to break the recent HI. HOWEVER, since the volatility increases dramatically at Major Tops and Bottoms, it will be a challenge not to be stopped out. I would rather trade the 5-min Charts in these circumstances, or even stay out until a clear break of Support is evident.

I would rather be short the British Pound, as that is probably the weakest currency at this point in time. We WILL see the BP at 50 CENTS in the not-too-distant future.

I agree I think short GBP/USD is the best bet right now. BP is really weak I am wondering whats keeping it above 16500??? Charts still look good for another 500pip sell off. There economy is in pitiful shape....I think this rally today was a great place to get on for the next run. Got burned in the EU bad today, worse single day in a while but I am short yet again. Looks like the USD took a dip on that health care news Saturday. As for gold I don't see a bit of weakness in it yet witch is gonna hold the CAD, and NZD up and that'll keep the euro up...so obvious bet to me at the moment seems to be long dollar short pound.

CharterJoe wrote --
"Doer, Do you mean BP 1.5000? You think there going to sell of 10,000 pips? I can never get a fell that far away. 50-200 pips is about as far as I can see on a really good day."

Glad you asked. NO -- I mean BP will go to FIFTY CENTS! Reason being, is that Britain is in far worse shape than U.S. What the hell do they have to sell? NOTHING, unless you really like kidney pie. Craftsman Tools used to be made there, then they sold out to China. So WHAT is left? Besides that, their Housing Bubble is even worse than ours.

But of course it will take a couple of years, so don't be gambling during the corrections. If you want to reduce your risk, do a Put Option going out to 2011. You will make 10X your money, but most guys here need more return than that.

CharterJoe, sorry you got burned in the EC, but that is the risk we take, when we work significant Tops or Bottoms. The Volatility increases dramatically, and can kill us, literally in a minute. So it is better to look for a Daily Reversal, then use intra-day action to reduce risk.

You can learn how to do that by getting Michael Parson's course, as I explained on a recent post --

The Gold Charts are forming up EXTREMELY WELL just now. This presents a fantastic opportunity to short Gold very soon, maybe in only days. Put Options would be a really safe bet, with very high reward/risk ratio. Just go out to 2011 so that option degradation is not too severe.

The collapse should be every bit as dramatic as Crude Oil was, so we need to keep on top of this Market very closely. Hopefully Price Action will hesitate for a few bars at the top, before heading down with a vengeance. That will be our opportunity.

The tip-off will come when Price Action breaks the very steep Lower Channel Line, which can be drawn from the low of the Bar at 1040 to the low of the final Bar at 1140, then extended. This can also be done on a 60-min Chart, in order to get a more accurate entry point.

British Pound is setting up for a good short-term trade that may end up very long-term. There is a Reversal tomorrow or next day, which would confirms the "Kiss-Good-bye" setup for going short, IF it is a HI. If the Reversal is a LO, then we would wait for another, similar setup. The "Kiss" can fall slightly long or short of the Line to be valid. It must not spike back thru the Channel Line dramatically, which would invalidate the entry signal.

At this point I am looking ONLY for shorting this Market, because it is due to break to the downside dramatically. So NO WAY would I want to be caught going long in that event.

The Reversal can be calculated more accurately by going to a 60-min timeframe, and drawing the same Triangle. I will continue posting Foreign Currency and Metals Charts here, as they relate directly to the "Dollar".

British Pound today made a small move down after yesterday's big move up. This is a normal R&R reflex, and may well be a Balance Point targeting prices slightly higher. If tomorrow's Reversal is a HI, then that would be a strong sell signal. Entry would best be off a 15-min Chart, as soon as Price Action broke an Upward Channel Line. Tomorrow's 60-min Chart could also develop a minor Balance Point that may clarify a final Target for Entry.

I am a contrarian by nature, so this trading method is tailor-made for me. However, I would not spit at a gift-horse Breakout Entry, either. For those using other technical tools, the 60-min Chart is at a top Bollinger Band. If prices go higher tomorrow as expected, then Bollinger would be an additional filter signaling a short entry --